Walmart reported its fourth-quarter results beat Wall Street estimates as the company adjusted to economic conditions and won market share while preparing to modify operations further with additional emphasis on home and apparel categories.
Walmart net income was $6.28 billion, or $2.32 per diluted share, versus $3.56 billion, or $1.28 per diluted share, in the year-prior quarter. Adjusted for one-time events, earnings per share were $1.71 versus $1.53 in the year-previous period, the company stated. An analyst consensus estimate published by Yahoo finance called for adjusted earnings per share of $1.51 and sales of $159.76 billion.
Net sales were $162.74 billion and total revenues were $164.05 billion versus $151.53 billion and $152.87 billion, respectively, in the year-previous quarter. Operating income was $5.56 billion versus $5.89 billion in the year-before period, and, adjusted for one-time events, operating income was $6.4 billion versus $6 billion.
For the full fiscal year, Walmart net income was $11.68 billion, or $4.27 per diluted share, versus $13.67 billion, or $4.87 per diluted share, in the year prior. Adjusted earnings per share were $6.29 per share versus $6.46 per share in the year previous, the company maintained.
Net sales were $605.88 billion and total revenues were $611.29 billion versus $567.76 billion and $572.75 billion, respectively, in the year previous. Operating income was $20.43 billion versus $25.94 billion in the year before, and adjusted operating income was $24.7 billion versus $26.1 billion.
For Walmart U.S., net sales were $113.7 billion versus $105.3 billion in the year-earlier quarter as operating income increased to $5.4 billion from $5.2 billion, according to the company. Comparable sales gained 8.3% in the period year over year with transactions up 1.8% and average ticket up 6.3%. The e-commerce contribution to comp was about 140 basis points.
For the fiscal year, Walmart U.S. net sales were $420.6 billion versus $393.2 billion in the year-earlier as operating income slipped to $20.6 billion from $21.6 billion. Comps gained 6.6% year over year.
At Sam’s Club, net sales were $21.4 billion versus $19.2 billion in the year-past quarter while operating income was $500 million down 6.2%, the company indicated. Comparable sales increased 12.2% year over year with transactions up 6.7% and average ticket up 5.2%.
For the fiscal year, net sales were $84.3 billion versus $73.6 billion in the year past while operating income was $2 billion, down 13.1%. Comps increased 10.5% year over year.
In a conference call, Doug McMillon, Walmart president and CEO, said the company generated annual sales that surpassed $600 billion for the first time. He said the company emphasized food and consumables in taking market share in the United States and Canada during a quarter when inflation was shifting consumer spending priorities. He expressed satisfaction with the results in general merchandise. Inventories finished flat versus the year prior, which was better than expected.
With inflation still troubling shoppers, McMillon said consumers are turning to Walmart and driving up its market share broadly, “including on the higher end, which made up nearly half of the gains we saw in the U.S. again this quarter. We’re also capturing a greater share of wallet at Sam’s Club in the U.S. with both mid- and higher-income shoppers.”
The company expects many higher-income customers to stick with Walmart after inflation moderates to take advantage of convenience services, such as curbside pickup, delivery and membership.
McMillon said that Walmart expects inflation to continue affecting sales, particularly in dry grocery and consumables.
“We’ll stay focused on general merchandise and earn sales in those categories to offset that impact as much as possible,” he said. “We’re improving in categories like apparel and home,” he said. “Our recently remodeled U.S. stores have a focus in those areas and the early response from customers is promising. We’re also improving our e-commerce assortment and presentation in those categories.”
McMillon added, “We’re excited about our momentum. The team delivered a strong quarter to finish the year, and as our results in the last two quarters show, they acted quickly and aggressively to address the inventory and cost challenges we faced last year. We built momentum in the third quarter and that continues. We are well-positioned to start this fiscal year.”
